Klaus Kleinfeld Quits Siemens AG: The Debate over Bribery Scandal*

            

Details


Case Code : CLBE017
Publication date : 2008
Subject : Business Ethics
Industry :
Length : 03 Pages

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Abstract: ICMR India ICMR India ICMR India ICMR India RSS Feed

A series of bribery scandals at Siemens AG led to the ouster of the company's CEO Klaus Kleinfeld (Kleinfled) who had turned around the ailing company in just two short years. His exit raised questions about the role of supervisory boards in the management of German companies as some analysts felt that the board had used the bribery scandals to get rid of Kleinfeld, who was reportedly not received well by the conservative old generation at Siemens. Analysts also felt that Kleinfled's successor Peter Loescher faced significant challenges in his new assignment.

Introduction

On April 25, 2007, Klaus Kleinfeld (Kleinfeld), CEO, Siemens AG (Siemens), announced that he would step down from his post. The announcement came in the wake of a number of scandals that rocked Siemens over a short span of time. Mixed reactions greeted Kleinfeld's exit. Some analysts felt that Kleinfeld should not have been replaced since he had been instrumental in turning Siemens around and bringing it back into profit. Kleinfeld had often been dubbed as the Jack Welch of Germany, and his exit raised questions about the role of supervisory boards in the management of German companies. Founded in 1897, Siemens was the largest engineering conglomerate in Europe and offered an array of products ranging from electronics, engineering equipment, telecommunications services, industrial automation, and power generation, to transportation...

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Key words:
Corporate Governance, supervisory board, leadership, management, management style, command and control style, Co-determination law, restructuring, Siemens AG, Merck & Co., slush funds, bribery scandal, Jack Welch, Klaus Kleinfeld, Peter Loescher, BenQ, Nokia, joint venture. control systems, compliance system





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